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Gardening leave: good for growth, or should it be put out to pasture?

Many of us no doubt enjoy the "being paid" part of work more than the "actually putting in effort" part. But what if you find yourself sent home when you'd rather be working? Some unwilling employees find themselves in this unenviable position when the end of their employment is nigh and their employers direct them to stay home on "gardening leave", rather than coming to the workplace and doing anything productive.

As much as our gardens might appreciate some TLC from time to time, an employer tends not to give this direction due to it having any horticultural sympathies. More often than not, an employee is placed on gardening leave as a business protection measure. For example, an employer may:

wish to avoid the departing employee from being a disruptive influence or having a negative impact on the workplace or staff morale;

be concerned that the departing employee may "permanently borrow" confidential or sensitive business information with the intent of using it to their advantage in their new employment;

want to prevent the departing employee from contacting its clients and encouraging them to move their business away when the employee departs; and/or

wish to ensure that any post-employment restraints are extended as far as possible. Rather than paying the employee out in lieu of notice, and the restraints commencing immediately, the employee is required to remain employed for another few weeks, with the restraints commencing at a later date.

Easy enough right? So why isn't everyone dispatched to work on their green thumbs prior to their employment coming to an end?

First, it may not be legally possible to put someone on gardening leave unless their employment agreement expressly allows for it. In the absence of a contractual gardening leave provision, an employee may argue that they have an inherent "right to work", and that their employer is breaching the employment agreement by not allowing them to perform any work.

Second, it may be of greater net benefit to the employer if the departing employee remains being productive in the workplace until the end of their employment, especially if appropriate risk-mitigation measures are put into place. For example, an employee may be directed to assist in transitioning clients or suppliers for whom they are responsible to other employees within the business, with a view to maximising the chance of retaining their business.

Third, an extended period of gardening leave may affect the enforceability of an employee's post-employment restraints. For example, it is open for an employee placed on gardening leave to question the fairness of, say, a six month post-employment restraint after they have already completed six months of gardening leave. This issue has not yet been conclusively determined by the courts, but it would not be surprising if an extended period of gardening leave led a court to find that a lengthy post-employment restraint was unreasonable.

So how should your business approach gardening leave? We recommend:

reviewing your employment agreements, to ensure that they contain an express provision which allows for employees to be directed to not attend the workplace or perform work;

carefully considering whether placing individuals or gardening leave would be helpful or appropriate, should the end of their employment be approaching; and

where an employee is required to work out their notice period, you closely monitor the employee's email and computer activity in the final weeks of their employment to ensure that they are not improperly uplifting or emailing any confidential information — in our experience, this occurs more commonly than not.

Gardening leave can be a useful tool to protect your business — you should consider whether your outgoing employees are better placed in the office or out among the roses!

This article is part of a regular employment law column series for HRM Online by Workplace Relations & Safety partner Aaron Goonrey and Lawyer Luke Scandrett. It was first published in HRM Online on 11 April 2017. The HRM Online version of this article is available here.

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